Spar Group Limited v Kwankcenke Trading CC and Others (LM006Apr15) [2015] ZACT 52 (8 June 2015)

Spar Group Limited v Kwankcenke Trading CC and Others (LM006Apr15) [2015] ZACT 52 (8 June 2015)

The Tribunal found that there is a horizontal overlap in the retail of food and groceries and a vertical relationship as the SPAR Group supplies goods to the target firms. However, the closest SPAR Group-owned store is 254 km away, eliminating any meaningful geographic overlap. The target firms purchase only 42-48% of their products from the SPAR Group, with the remainder sourced from other suppliers who have alternative customers. The Commission’s investigation revealed no foreclosure concerns. The transaction will not negatively affect employment, as all employees will be retained. No other public interest concerns were identified. The Tribunal agreed with the Commission’s findings and...

Citation
[2015] ZACT 52
Parties
Applicant: The SPAR Group Limited; Respondent: Kwankcenke Trading CC; Respondent: Ndu’s SPAR CC
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
8 June 2015
Case Number
LM006Apr15
Procedural Posture
Merger Approval / Reasons for Decision
Outcome
Merger approved unconditionally.
Judges
Norman Manoim, Medi Mokuena, Andiswa Ndoni
Legal Topics
Large Merger, Horizontal Overlap, Vertical Relationship, Foreclosure Concerns, Public Interest Employment
Competition Law Large Merger Horizontal Overlap Vertical Relationship Foreclosure Concerns Public Interest Employment

Case Brief

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Parties

The SPAR Group Limited

Applicant

Kwankcenke Trading CC

Respondent

Ndu’s SPAR CC

Respondent

Procedural Posture

Merger Approval / Reasons for Decision

Legal Issues

  1. 1 Whether the proposed merger would substantially prevent or lessen competition in the relevant markets.
  2. 2 Whether the transaction raises any public interest concerns, particularly regarding employment.

Ratio Decidendi

The Tribunal found that there is a horizontal overlap in the retail of food and groceries and a vertical relationship as the SPAR Group supplies goods to the target firms. However, the closest SPAR Group-owned store is 254 km away, eliminating any meaningful geographic overlap. The target firms purchase only 42-48% of their products from the SPAR Group, with the remainder sourced from other suppliers who have alternative customers. The Commission’s investigation revealed no foreclosure concerns. The transaction will not negatively affect employment, as all employees will be retained. No other public interest concerns were identified. The Tribunal agreed with the Commission’s findings and...

Court Disposition

Merger approved unconditionally.

Orders

  • The large merger between The SPAR Group Limited and Engcobo SUPERSPAR and Ndu’s SPAR is approved without conditions.